1290 Retirement 2030 Fund may not appeal to sustainability-conscious investors.
The ESG risk of 1290 Retirement 2030 Fund's holdings is comparable to its peers in the Target Date category, thus earning an average Morningstar Sustainability Rating of 3 globes. Funds in the same category rated 4 or 5 globes tend to hold securities less exposed to ESG risk. ESG risk measures the degree to which material environmental, social, and governance issues, such as climate change and inequalities, could affect valuations. ESG risk differs from impact, which is about driving positive environmental and social outcomes for society’s benefit.
1290 Retirement 2030 Fund has a Carbon Risk Score of 8.73, indicating portfolio companies face low carbon-related risks in the transition to a low-carbon economy.
One potential issue for a sustainability-focused investor is that 1290 Retirement 2030 Fund doesn’t have an ESG-focused mandate. A fund with an ESG-focused mandate would have a higher probability to drive positive ESG outcomes. Currently, the fund has 8.45% involvement in fossil fuels, which is higher than 6.95% for the average peer in its category. Companies are considered involved in fossil fuels if they derive some revenue from thermal coal, oil, and gas.
The fund exhibits moderate exposure (5.08%) to companies with high or severe controversies. From bribery and corruption to workplace discrimination and environmental incidents, controversies are incidents that may negatively affect stakeholders, the environment, or the company’s operations.